IMF approves second tranche of Egypt loan
Cairo, Egypt - The International Monetary Fund (IMF) approved a second tranche of a US$12bn loan to Egypt, praising the country’s tough economic reforms that have fuelled inflation.
In a statement on Thursday, IMF managing director Christine Lagarde said the approval of the roughly US$1.25bn tranche showed ‘the IMF’s strong support for Egypt in these efforts’.
The IMF and Egypt had agreed the loan last November, as the North African country devalued the pound and after it introduced a value-added tax in a bid to boost government finances and its foreign reserves.
Egypt has also slashed fuel subsidies, most recently last month. “We believe that these efforts will yield results,” Lagarde said.
But concerns remained about inflation, which hit 32.9 per cent in April before declining slightly in May. “The authorities’ immediate priority is to reduce inflation, which poses a risk to macroeconomic stability and hurts the poor,” said David Lipton, the IMF’s acting chair.